Bi-partisan support urged for ABIP

The Property Council of Australia welcomes the introduction to Parliament of the legislation to establish the Australian Business Investment Partnership (ABIP) $4 billion liquidity fund for the commercial property sector.

The Property Council urges bi-partisan support for this legislation to inject stability and confidence into the economy.

Property Council Chief Executive, Peter Verwer, says "Real estate is the nation's collateral. Property values should be set by supply and demand fundamentals ... not the priorities of foreign financiers and governments."

"There is clear and present risk of foreign lender withdrawal from Australia. Foreign banks have been told to focus on homeland markets by their new owners - foreign governments."

"The Property Council has this week surveyed its members and they report that over 20 foreign banks from Europe (43%), USA (26%), and Asia (31%) have signalled plans to reduce their exposure to Australian commercial property funding, or have already withdrawn funding."

Domestic banks can't fill the void, which means owners will be forced to needlessly liquidate their assets.

There is virtually no capacity in the Australian debt market. The CMBS and corporate bond markets are effectively closed to commercial property funding.

"ABIP is an essential mechanism to inject stability and confidence into commercial property lending.

"This is a decisive and sensible action.

"ABIP is a temporary, contingency mechanism to help ensure that wellrun property companies, which manage the savings of millions of mum and dad investors, superannuation policy holders and retirees, are not needlessly penalised by the current lack of refinancing capital.

"This will protect the lending collateral for Australian small businesses, whose jobs and productivity will help lead us out of this economic slump."